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MACAU BUSINESS By Nelson Moura By Paolo A. Azevedo


Jeju – the new Singapore


Ticking bomb


Gaming law expert António Lobo Vilela warns against gaming operators’ Pandora’s Box scenario linked to junket deposits


Jeju will be as big as Singapore in terms of Gross Gaming Revenue, predicts Lawrence Teo. The Chief Operations Officer and Vice President of Dream Tower, the tallest Integrated Resort under construction on the Korean destination island, explains to Macau Business why Lotte Tour decided to enter the casino business and create a landmark. All bets are on making the casino resort the crown of the tourism jewel the company has been dominating for four decades


T 18 OCTOBER 2017


he possible future liability held by gaming operators over junket deposits operators in casino VIP room is a ‘Pandora’s Box’ that could open if a new wave of sudden ‘gaming promoter runs’ to withdraw the funds occurs,


gaming law expert António Lobo Vilela states in a legal review article. In a legal article published by The Law Reviews, the former Macau SAR senior government advisor analyses the liability held by Macau gaming operators over activities carried inside casinos by gaming promoters, with a stern warning made over the ‘ticking time bomb’ that VIP room deposits could pose. Under Macau gaming law the reception of funds in deposit or other repayable funds by gaming promoters for a purpose other than the selling of casino gaming chips bought from a casino operator on credit, with or without the payment of interests or with the payment of interests lower than those offered by banks, is deemed illegal.


M


‘Pandora’s Box” António Lobo Vilela


18 MAY 2021


acau Business – From Lotte World, a major recreational complex [with the world’s largest indoor theme park, in Seoul] to an integrated resort with casino in Jeju. A different beast. A


natural evolution? Lawrence Teo – Business is the same. But building


“No numbers exist on the funds on deposit with gaming promoters, aimed at financing their VIP


a landmark. M. B. – The group [Lotte] has created other landmarks in different types of business. Why would this be different? L. T. – Yes, Lotte Group has already created


However, over the years, some gaming promoters will engage in deposit-taking activities, with some junkets distributing high interest in an attempt to raise funds for the extension of credit for gaming. Such junkets will seek investors, solicit funds, and offer high-interest rates for deposits acting as banks by soliciting investors’ funds, paying monthly dividends to those who invest in their operations. ‘No numbers exist on the funds on deposit with gaming promoters, aimed at financing their VIP operations, which turns impossible to know if we are in the face of a ‘Pandora’s Box’ […] The reception of funds on deposit works as a (kind of) Ponzi scheme, which lasts as long as most investors do not withdraw all their funds,’ warns Mr Lobo Vilela who served as senior legal advisor to the Secretary for Economy and Finance between 2016 and last December.


Denial


In 2020 the CEO of junket group Suncity Group, Alvin Chau, issued a public statement denying a storm of online rumours alleging the company was the target of a nationwide anti-crime operation by Chinese authorities which had reportedly led to hundreds of patrons, within a couple of days, to withdraw funds on deposit with the largest local junket group. According to Mr Lobo Vilela economic


downtown Seoul and Lotte Super Tower. We’re trying


operations, which turns impossible to know if we are in the face of a


repercussions that the COVID-19 pandemic will undoubtedly bring in the medium-long run, and increasingly stringent the PRC authorities are in restricting offshore gambling of their citizens, may ‘spark new waves of a stampede’. The impact of the Covid-19 pandemic in 2020 and


to do the Dream Tower in Jeju. Lotte here is being just a family company; we’re a different company [Lotte Tour]. It’s not going to be [just] the tallest and the largest building in Jeju, that’s just the hardware. We say that a landmark should be the most visited destination, where tourists will go to eat, shop and maybe [visit] our observation deck. A must-visit point destination. Because of the hardware, and also the software.


M. B. – What are the main goals that you definitely


want to achieve with this Integrated Resort (IR)? L. T. – Number one EBIDTA on IR in Korea. There’s


increased capital transfer regulations enforced by Chinese authorities this month have also compounded the woes of the already severally impacted local VIP market in recent years. The increase in junket operations oversight has also


led to the continued drop in the number of licensed junket promoters continues to decrease, from 235 in 2013 to 85 in 2021.


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